[DDickson]

"It brought a case against Discover Bank last summer, saying it inflated the amounts it said borrowers owed on their loans.

Discover Bank paid $18.5 million without admitting or denying wrongdoing."

These fines are just a calculated cost of doing business for companies like Discover, Sallie Mae, etc. They take the likelihood of getting caught breaking the law, multiply it by how much they'll have to dish out when they get caught, and subtract that from what they'll make by extorting their "customers."

In this case, Discover made a good financial decision on their part. Hooray for creating value for the shareholders.

[IkmoIkmo]

I literally took a course in Finance while in business school in which we were taught how to run these calculations (obviously the 'governance' week of the course). Pretty scary to think people actually sit down at their desk and knowingly run the numbers and decide from there. But that's what you get when hardly anyone who commits a blatant crime like that generally is held accountable (i.e. individual culpability, e.g. individual fines or jail time), and the only negative (a fine) is already priced into the model, and the individual's rewards are a promotion. That's a system that, essentially, delivers incentives for crime and it's insane.

[grendelt]

...Literally? Not just the figurative "course in finance" we all hear so much about?

[jsprogrammer]

No, they actually picked up that course and moved it somewhere else.

[IkmoIkmo]

:)